No Va. special session on liquor

RICHMOND - After months spent lobbying legislators and the public, Virginia Gov. Robert F. McDonnell bowed to political reality Friday and retreated from his push to hold a special legislative session this fall to consider privatizing the state-run liquor business.

The decision represents a significant political setback for McDonnell (R), who concluded that mounting bipartisan opposition would prevent him from delivering on a key campaign promise in his desired time frame. The governor had repeatedly said he hoped the legislature would meet before Jan. 1 to take up his proposal.

But when the governor made the announcement Friday afternoon, he said he had not abandoned the effort to end the state's 76-year-old monopoly on the sale of hard liquor. He promised to introduce a bill to privatize the state's Alcohol Beverage Control system on the first day of the legislature's regular session in January.

McDonnell presented the delay as little more than a shift in strategy designed to avoid the experience of his predecessor, Gov. Timothy M. Kaine (D), who in 2008 called the legislature into an unproductive special session on transportation.

"We will privatize Virginia's ABC stores. The only question is one of timing," he said in a statement. "As Governor, I will not call a Special Session to debate; only to act."

Philosophically, he repeated assertions that government shouldn't be in the liquor business. But he acknowledged that his liquor plan does not have enough votes to pass the General Assembly and said that calling legislators to Richmond to take up the measure now would be a waste of time.

"He's trying to make a virtue out of a necessity," said Robert D. Holsworth, a longtime Virginia political analyst. "Ultimately, he's buying some time, hoping he can find a compromise or trade-off to gain more GOP support. But this is an uphill climb."

Under McDonnell's liquor plan, authority to engage in the wholesale and retail distribution of spirits would be sold to private interests. Virginia's 332 state-run liquor stores would be replaced by 1,000 private retailers, including grocery and convenience stores.

McDonnell has said that auctioning liquor licenses would generate a one-time windfall of $458 million, money he says could be used to improve state roads without raising taxes.

But giving up the state monopoly would also result in a projected revenue loss of $47 million a year, money that Virginia spends on core services such as schools, public safety and health care.

The ABC initiative has consumed McDonnell's energy for months. His staff spent the summer meeting behind closed doors with liquor interests, retail business representatives and others. McDonnell presided over eight town hall meetings across the state to sell the public on the idea.

But the plan has been in trouble since his staff officially unveiled it before the governor's Government Reform Commission in early September. He has tweaked the plan once in hopes of building support.